After four downgrades in the past decade, the city of St. Louis' credit rating has taken a positive turn.
Moody's said Monday that it lifted the city's general obligation debt by one notch, to A3 from Baa1. A3 is the firm's seventh-highest rating, and Moody's says bonds in the "A" category are "upper-medium grade with low credit risk."
In its news release, Moody's cited St. Louis' "materially improved financial profile following consecutive years of surplus operations coupled with a large, regionally important tax base." It added, though, that the city has a "below-average financial profile" and a shrinking population.
St. Louis Comptroller Darlene Green said in a statement that the upgrade reflects "the steady work we have done as a city to build reserves and strengthen fiscal management." The city finished fiscal 2021 with an operating surplus of $31.9 million.
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Over time, a higher credit rating should reduce the city's borrowing costs.